Despite a rise in the first quarter, Vietnam's rice exports seem destined to end the year in the red, with the rot expected to set in from the second quarter onwards.
The Ministry of Trade said that exports in the second quarter were expected to fall 10 per cent year-on-year, partly due to a severe drought which hit production in the first three months.

In the three months to June, Vietnam was poised to export 1.25 million tonnes with earnings falling 8 per cent to US$225 million.

The ministry however attributed the fall in exports mainly to the fact that the country exported excessively in 2003, cutting too deeply into its 2004 reserves.
In the first three months of this year, it exported 808,000 tonnes of rice, an increase of 6.1 per cent compared with the last year.

The ministry on Tuesday warned rice farmers and exporters, who are holding on their rice stocks awaiting higher prices, about an imminent drop in world prices.

India is set to resume export of the grain in the next few months while China plans to sell some of its stocks with an eye on curbing the current price rise. China also late last month cancelled contracts to import Thai rice.

The Vietnam Foodstuff Association has also told its members not to buy more rice from farmers if they have enough stocks to fulfil existing contracts.

According to the ministry, Thai rice prices have already begun inching downwards and now stand at $233 per tonne for 25 per cent broken rice.

Vietnam, the second-biggest exporter after Thailand, expects to ship 3.5 million tonnes of rice this year, a fall of 11.2 per cent over 2003, the ministry said.

Rice is Vietnam's top farm exports earner with Southeast Asia buying 34 per cent of its exports. Indonesia and Philippines are the two biggest buyers.